Yarn producers are awaiting festival demand from the textile sector to avoid production cuts. The demand was dwindling in recent past on high prices and acute liquidity situation.
Currency depreciation in the recent months have helped surge in textile exports and hence yarn traders could get relief from their stock piles.
“Now, consumers and mills don’t have stock so there is possibility of some surge in demand,” said Jaikrishna Pathak, President, Bombay Yarn Merchants’ association.
Falling crude oil prices have also helped local synthetic yarn producers to cut prices as most of the raw material is produced from crude oil based products.
Road will not be completely smooth for synthetic yarn and raw material manufacturers. This is because China, a major producer of petrochemicals required for producing synthetic yarn, is expected to permit local manufacturers to continue production as usual as Olympics games are now over.
It may be remembered that prior to Olympics games China had asked all chemicals and petrochemical producers to discontinue or reduce production which was intended for controlling pollution. Hence increased supply from China will affect local producers. Cotton yarn market is expected to improve in coming days as exports demand is seen on the back of falling rupee. This has resulted in increase in the local prices also.
Things are not looking as good in nylon yarn as prices are still higher and demand is saturated because of high prices. GSFC has cut caprolectum prices last week. Caprolactum is important raw material for producing nylon yarn. Some take off is seen in nylon yarn if prices falls further, said a dealer.